We wanted to post this update on Friday morning. However it was not possible. Even thought July beans declined beyond our initial projections, November beans met our price targets inside the window of time for Gann's 14 years cycle.
This update will focus on the November beans contract including geometry and cycle analysis. It also shows velocity price projections and momentum indicators. This analysis indicates that a bottom may have been made on June 17, 2014.
November soybeans cycle update and PTV analysis
Figure 1 is a daily price-time chart for November soybean futures. It includes the most recent cycle harmonics aligning with the tops of April and May 2014 and the recent bottom of June 2014.
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| Figure 1 Daily prices for November soybean futures in 2014. Gann's 14yrs cycle aligning with April 17 top (red) and Gann's 20yrs cycle aligning with May 22 top (pink). A harmonic of Gann's 14yrs cycle aligning with June 17 2-day swing bottom (green). PTVs related to the first Square of Twelve defining up and down swings since early 2014. |
Figure 1 also shows several PTVs[1]. Their lengths are related to the first Square of Twelve, 144.
The uptrending market from late January 2014 to May 22 top measured √2 x 144. The PTV connecting January and June bottoms measures the first Square of Twelve. The sum of the PTVs defining the uptrend until May and the following reaction until June equals two times the Square of Twelve or 288.
Our initial cycle projection indicated that our window of tolerance for Gann's 14 years cycle harmonic was between June 10 and 14. November beans made a triple bottom formation between early and mid-June. The final bottom seems to have come on June 17.
November soybeans velocity Price Projections
Figure 2 is a daily price-time chart for November soybeans futures and a market velocity indicator. These velocity price projections indicate 1200 1/4c and 1203 3/4c as targets. On June 5th the market reached 1201 1/4c and on June 17, before rallying, November beans reached 1202 1/2c. The market reached those targets and rallied, remaining above them.
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| Figure 2 Daily prices for November soybean futures in 2014. Market velocity indicator and velocity price projections averaging 1202c. |
November soybeans momentum analysis
Figure 3 is a daily price-time chart for November soybeans and a momentum indicator. The figure shows a bullish divergence in the 5, 3 and 1-bar momentum curve. This is an indication that a rally in due.
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| Figure 3 Daily prices for November soybean futures in 2014. Momentum indicator showing a bullish divergence on June 2014. |
Summary
Gann's 14 years cycle harmonic seems to have aligned with a swing bottom in mid-June 2014. PTV lengths, velocity price projections and momentum analysis confirm that a rally is due. Breaking above the previous 2-day swing top at 1232 1/2c and closing slightly above it is additional indication that a bottom has been made.
At the beginning of the year, our projections indicated that after a November bottom, a secondary bottom could be made between January-February ending, most likely, with a May top. The market behaved exactly as predicted.
However, we still have some indications that prices still could go up towards the end of the year, breaking above the recent May top.
Ricardo Da Costa
Grain Market Analysis
Yesterday's decline was a surprise. Soybeans, corn and wheat all declined.
ReplyDeleteSoybeans did rally in mid-June but it seems the May-2014 top is more important than we initially figured.
There is a yearly cycle due for early July-2014.